Reinsurance is a very common and indeed powerful tool that insurers can use in many parts of the organisation. It is used for a variety of reasons, including risk management, capital management, access to technology and services, and alternative asset strategies. And more.
Ultimately, the purpose of an insurer is to help its policyholders manage their own uncertain future financial risks. It does so by taking on those risks, pooling them to achieve diversification, and earning a return on the capital required to back the business.
To this end, the reinsurance strategy and framework of any insurer may have a significant impact on its ultimate performance, its business and risk profile, its capital position, and its ability to remain solvent and grow, and thus continue to meet its policyholders’ needs well into the future.
However, as a Working Party, we believe that reinsurance is not always optimised to support an insurer’s objectives, and may even destroy value through poor design and implementation.
This paper considers both a holistic framework for and the various elements of, the reinsurance strategy and implementation. While the paper is likely to be of particular interest to the purchasers and managers of reinsurance, it should also be of interest to a wide range of parties with an interest in the financial and risk management of both insurers and reinsurers.
Although we highlight a number of areas where we have observed that decisions or processes may be sub-optimal, this is done to provide a resource that will allow the use of reinsurance to be enhanced. We do not imply (nor do we believe) that reinsurance is fundamentally flawed, either in how it is bought or sold.
The L&H Reinsurance Working Party
The members of the Working Party include actuaries employed by insurers, reinsurers, and consultants. This diverse group allows the Working Party to present views from all angles of reinsurance transactions.
As of January 2022, the members of the working party include:
Alexandra Manion, Arminder Kainth, Benoit Rio, Craig Gillespie, David Lipovics, Greg Solomon (Chairman), Kyle West, Niall Kavanagh, Peter Mannion, Ruud van Doorn, Tom Keel
Previous Outputs of the Working Party:
- 'Enhancing reinsurance', Greg Solomon - Actuary Magazine December 21 Edition
- Life Conference 2018 presentation
- Reinsurance should be a tool, not a habit - Life Conference, 2015
- Life Reinsurance Working Party Infographic
- References for Relevant Reinsurance Resources.
- 9 November 2017
You might also like
If you want more information about this research working party please contact the Communities Team.
Filter or search events
The Actuaries’ Carbon Collaboration (ACC) is a group of actuaries and other professionals working towards a coherent understanding of the issues around greenhouse gas (GHG) emissions by considering them in an actuarial context.
Emissions into and absorption from the atmosphere can be modelled in the same way that we model variable cash flows, including the impacts of uncertain quantities and timing. The ACC’s work investigates both the insights that this analogy provides and its limitations.
This talk presents the work of the Data and Modelling workstream of the IFoA Mental Health Working Party. We explore data and modelling considerations in the risk assessment and underwriting of mental health conditions. We will also consider how newer risk factors and improved data availability might open up opportunities for additional underwriting and product designs.
As the industry prepares for Pensions Dashboards, we have lined up a specialist panel who is at the heart of the ongoing work in this area. Hear the latest developments, future proposals and have the opportunity to put forward your questions to our speakers.
Crisis management, the process by which an organization deals with a disruptive, sudden and unexpected event that threatens to harm the organization or its stakeholders, has become a key concern in the light of the Pandemic and Geopolitical risks.
Artificial Intelligence is heralded as a game-changer to the ways industries use data, with the insurance industry especially looking to embrace these new technologies. This brings many questions – not least around data privacy, ethics, potential biases and so on – with regulators increasingly interested in developments.
Moreover, whilst the stunning progress of specific technologies such as Watson and Alphazero made headlines some years ago, current commercial applications of AI remain far from mature.
This webinar will cover:
• Some background on the risks of misselling in an ESG context, including the DWS case
• Achieving positive impact is a strong antidote to the risks of greenwashing or ESG misselling, however this risks having a tension with fiduciary responsibilities
• This tension can be resolved with a concept called Universal Ownership
• Under Universal ownership, investors have an appetite to make a loss in order to achieve positive impact, and yet still have no compromise on their fiduciary responsibilities
This session will focus on the transformation roadmap of the healthcare sector in KSA and the role of actuarial capabilities in enhancing its evolution to the desired end stage as per the objectives of the Vision 2030. The discussion will focus how the system has evolved so far and shed light on the expected future changes. Through examining the transformation, we will highlight how the sector is and can use actuarial expertise to not only assist with this transformation but also use basic actuarial principles to identify the key risks and their respective mitigation strategies.
The purpose of this research paper is to explore enterprise risk management lessons which can be learnt from the Covid-19 pandemic in preparation for potential future pandemics as well as other “gray rhino” or “black swan” events. This paper is not intended to be an all-encompassing solution to the issues presented by Covid-19; rather, the content has been provided to help drive discussions regarding how risk management processes may need to evolve in line with the dynamic nature of the underlying risks that they sometimes need to capture.
The IFoA's Infrastructure Working Party, led by Chris Lewin, will present its new introductory guide to infrastructure investment, which will be published on the IFoA web-site prior to the webinar. Those readers whose institutions have already taken the plunge into infrastructure will know that it is a highly complex and diverse field of activity. This guide does not explore all the matters which investors take into account, but it does discuss many of the more important points, including the risks and past returns, benchmarking, and ESG and SDG considerations. Attendees will be invi
Health contributes to happiness at the personal, family, community and societal level. Health, importantly underpins all our economic security. This talk will explore the drivers of our health, the measurement of health and the steps we can take to improve health – most of which lie outside the NHS.